Tax Clarity at Last

After years of “will they or won’t they?” speculation, Congress finally delivered a dose of certainty on taxes in mid-2025. The One Big Beautiful Bill Act put an end to the looming sunset of the 2017 Tax Cuts and Jobs Act, making many of its key provisions permanent – and adding a few new twists that could reshape your tax strategy for years to come.

THE TCJA SUNSET

The TCJA introduced sweeping changes: lower tax rates, a doubled standard deduction, expanded estate and gift exemptions, and a $10,000 cap on state and local tax deductions. But most individual provisions were set to expire after 2025.

That looming expiration created years of uncertainty. Taxpayers, advisors and estate planners were left guessing whether Congress would extend, revise or let the TCJA fade away. Multiyear planning became a gamble, especially for high earners and those with complex estates.

OBBBA ended the guessing game.

WHAT’S STAYING, WHAT’S CHANGING AND WHAT’S NEW

TCJA PROVISIONS MADE PERMANENT

• Tax brackets: The current lower rates (10%-37%) are here to stay, giving us the ability to return to long-term income tax forecasting with confidence.
• Standard deduction: The doubled deduction remains, adjusted annually for inflation, preserving a compelling case for not itemizing – but other changes may balance it out.
• Estate and gift tax exemption: Permanently expanded to about $14 million per person in 2025, rising to $15 million in 2026, with no more threat of clawback for prior gifts. Larger estates could continue to see benefits from dynasty trusts, gifting strategies and generational transfers.
• Qualified business income deduction (Section 199A): Made permanent for pass-through businesses, giving small-business owners long-term clarity.

FIXES TO TCJA

• SALT deduction cap: Raised from $10,000 to $40,000, indexed for inflation. Phases down between $500,000-$600,000 modified adjusted gross income. Taxpayers in high-tax states will reap the most benefit.

NEW TAX BREAKS

• Senior deduction: An extra $6,000 for taxpayers aged 65+, which makes room for planning opportunities around Social Security and retirement income. Phases out starting at $75,000 MAGI ($150,000 for married filing jointly).
• Auto loan interest deduction: Up to $10,000 for vehicles assembled in the U.S., with phaseouts starting at $100,000 (single) and $200,000 (married filing jointly).
• Charitable contributions: Non-itemizers can deduct up to $1,000 ($2,000 married filing jointly) starting in 2026. Also in 2026 and after, itemizers face a new 0.5% “floor” before any contributions are deductible, which could change how giving strategies are structured.

PLANNING OPPORTUNITIES IN 2025 AND BEYOND

With the uncertainty lifted, strategic planning can finally move forward. Here’s where to focus:

INCOME TAX PLANNING

Stable brackets mean you can confidently plan Roth conversions, installment sales, capital gains recognition, and other income acceleration or deferment strategies across multiple years.

ESTATE AND GIFT PLANNING

High exemptions are here to stay and unlock greater gifting opportunities.

SALT STRATEGY

The higher SALT cap revives itemizing strategies, including potentially bunching deductions or pulling forward state and local taxes, for some taxpayers. It also adds a twist to relocation planning for retirees considering a move.

RETIREMENT AND SENIOR PLANNING

The new senior deduction can help shift income into lower brackets, and can integrate with RMD, pension and Social Security planning for a more tax-efficient retirement.

BUSINESS PLANNING

With the QBI deduction locked in, business owners can revisit entity structures, compensation models and distribution strategies with confidence.

WHAT YOU SHOULD KNOW NOW

The new rules give you lots of opportunity to reassess strategies and plans. Here’s what to make sure you’re exploring:

• Tax projections and potential Roth conversions
• Estate plans and gifting strategies
• Your business structure and compensation model, given the permanent QBI rules
• Potential changes in state residency and SALT impact
• Your charitable giving approach

MOVING FORWARD WITH CONFIDENCE

The OBBBA delivers what taxpayers have long needed: clarity. By making key TCJA provisions permanent, fixing known issues and introducing new deductions, it sets the stage for smarter, more confident planning.